Goodwill Industries of Central Arizona intends to merge this year with Goodwill of Northern Arizona, agency officials said.

A potential merger had been on the horizon for a while, said David Hirsch, president and CEO of Goodwill of Northern Arizona. The Flagstaff-based agency was hindered financially by a decline in donations, retail store sales and increased costs, Hirsch said.

"The new minimum wage increases further compounded the financial concern and brought merger discussions to the forefront," Hirsch said.

Arizona voters passed an initiative in November that will increase the state's minimum wage in stages. The first occurred last month, increasing from $8.05 an hour to $10. It will increase to $12 in 2020.

Tim O'Neal, president and chief executive Officer for Goodwill in Central Arizona said through a spokeswoman the merger will strengthen the resources and services that the agency provides in the northern and central Arizona regions.

"When one of us was struggling to fulfill these services to the best of our ability, it only made sense to discuss a potential merger and ensure we could continue to meet the needs of Arizonans in both territories," O'Neil said in his statement.

"By combining our resources, we are well-positioned to assist any Arizonan who is looking for gainful employment," he added.

People drop off donations at Goodwill.(Photo: Goodwill, handout)

One of Goodwill's first priorities if the merge goes as planned would be to restore some programs and services that were previously scaled back, Hansen said.

The organization is working through the details and hope to receive local board approval sometime in March so that they can seek the Goodwill International board's approval in April.

Goodwill Industries of Central Arizona, based in Phoenix, was founded in 1947 and has more than 70 locations across the Valley. It's been consistently opening new locations and placed thousands of Arizonans with more than 600 employers last year.